Your standard auto insurance may not cover the replacement cost of your new car if it is totaled. This is an unfortunate reality of depreciation. Your new car loses value as soon as you leave the dealership lot, and if your car is totaled just 12 months after you purchase it, you could be covered for several thousands of dollars less than what you paid for it if you’re only covered for the market value of the car.

But is there a way to get reimbursed for the price you paid for your car? Thankfully, yes. One way is to get gap insurance for your car. Gap insurance covers you for the difference between the money you owe on your car loan and the car’s “fair market value.” Gap insurance can save you thousands of dollars.

You should also ask about the possibility of getting new car replacement coverage. Under certain policies, you may be entitled to a new car if your car gets totaled within a certain period. Check the details for this coverage – for how long after you buy it can you be eligible for this coverage? Is there a limit on how many miles you can drive?

Having auto insurance, Woodland Hills that has replacement cost coverage or gap coverage will give you peace of mind.